Lifetree Trading Pte., Ltd. v. Kingston

Before
the court are Defendant Jacob O. Kingston's four Motions
to Quash Subpoenas. (ECF Nos. 68-70, 72.) The subpoenas,
which are largely identical, require Washakie Renewable
Energy, Jacob Kingston, Isaiah Kingston, and Sally
Kingston[1] to do as follows: appear before this court
for a hearing June 12, 2018, at 8:30 a.m. during which the
court will hold an evidentiary hearing on the writ of
attachment and produce all bio fuel tax credit forms signed
by Kingston between 2012 and 2015, all communications from
the IRS and other federal agencies that the bio fuel credits
were improper or subject to repayment, and all documents
identified in Isaiah Kingston's declaration, which was
attached as an exhibit to Kingston's response to the
motion for writ. Defendant argues the subpoenas are improper
because they seek irrelevant information, are not
proportional, and implicate Isaiah and Jacob Kingston's
Fifth Amendment rights. Having considered the briefing and
otherwise being fully informed, the court determines oral
argument is unnecessary, Local Rule D.U. Civ. R. 7-1(f), and
acting within its discretion DENIES Defendant's motions
for the reasons stated herein.[2]

[p]arties may obtain discovery regarding any nonprivileged
matter that is relevant to any party's claim or defense
and proportional to the needs of the case, considering the
importance of the issues at stake in the action, the amount
in controversy, the parties' relative access to relevant
information, the parties' resources, the importance of
the discovery in resolving the issues, and whether the burden
or expense of the proposed discovery outweighs its likely
benefit.[3]

First,
the three categories of evidence requested are relevant. The
first and second requests relate to fuel credits Washakie
Renewable Energy may have claimed while Kingston was the CEO.
These credits are the subject of a purported fraud
investigation being undertaken by the United States
government, which LifeTree has alleged as evidence
demonstrating Washakie had fraudulent intent when it
transferred approximately $10 million to Kingston and that a
fraud would be perpetrated if the corporate veil is not
pierced to allow LifeTree to recover from Kingston.
Therefore, the requests for information about fuel credits,
including what credits were reported and whether Kingston had
notice that that the credits may have been improperly filed,
are relevant to show fraud. The documents referenced in
Isaiah Kingston's declaration are similarly relevant.
Isaiah's declaration was submitted as foundation for the
documents Jeremiah Grant relied upon in issuing his expert
opinion on Washakie's financial status.

Second,
the three categories are proportional to the needs of the
case. This case involves a dispute over a $10 million
transfer as well as liability for a more than $30 million
judgment. The information should not be difficult to access
as it includes recent tax records, which should be kept on
file by the company, and documents Defendant has already
relied upon in this litigation. Because they should be
relatively easily accessed, they place a limited demand on
Defendant's resources. Despite all this, Defendant argues
a lack of proportionality because Plaintiff seeks “all
documents regarding a topic.” (Motion to Quash p. 5,
ECF No. 70.) While a request for an entire category of
documents may sometimes be overbroad, this is not such a
case. The scope of the requests for fuel credits is limited
to the time between 2012 and 2015 and the requests are for
only some of the documents related to fuel credits-those
signed by Kingston or written by United States agency and
indicating improper or subject to repayment. The request for
those documents Isaiah Kingston identified in his declaration
is necessarily limited to those cited by him.

Finally,
the Fifth Amendment does not bar production of the documents
at issue because they are already in the custody of the
United States Internal Revenue Service. (Decl. of Laura
Fuller ¶ 5, ECF No. 70.) See United States v.
Hubbell, 530 U.S. 27, 44 (2000) (quoting Fisher v.
United States, 425 U.S. 391, 411 (1976))
(“‘The existence and location of the papers are a
foregone conclusion and the taxpayer adds little or nothing
to the sum total of the Government's information by
conceding that he in fact has the papers.'”).

For
these reasons the motions to quash are DENIED.

---------

Notes:

[1] The subpoena of Sally Kingston does
not request the documents from Isaiah Kingston's
declaration.

[3] &ldquo;Rule 45 does not include
relevance as an enumerated reason for quashing a subpoena. It
is well settled, however, that the scope of discovery under a
subpoena is the same as the scope of discovery under Rule
26(b)4 and Rule 34.&rdquo; In re ...

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